From various comments here, and some direct experience of my own, it appears the collection of taxes can be computerized at moderate cost for small businesses. I say moderate because web competition can be fierce and margins razor thin. Back when I was selling online, I often considered myself lucky to gross 20% on a $5 item, meaning my net might be 10%. So... take out even the $.10 mentioned above for calculation for the collection - yeah, even that is pretty significant.
Worse, however, is the time involved in filing. In my state you do it annually, quarterly, or monthly depending on overall sales, which in my case recently became a real pain because although my consulting income (by far my biggest source of income) is not subject to sales tax (unless I sell an item in conjunction with the consulting work, and that item is of course then taxed), that consulting income now adds to the total used to figure how often I must file, even if I do not sell a single item. Grrrrrr....!
But, anyway, back to the filing & sending in payments - it’s semi-automated on my state’s tax authority’s website, but, still, when all is said and done, I’ve probably spent couple hours on it, each time I file. It might be a LITTLE more efficient to do ‘em all sequentially, but that’s offset by the time needed to understand all the different States’forms, and any changes as they crop up occasionally. Once registered, I have to file each period even if there is NO tax liability for that period. This times 50? Quarterly, most likely? Oh, yiii-yiii-yiii!!!
This is not a matter of how “smart” I or another poster may be (a really “fugly”, telling, and not very “smart” comment by you, I would say.) Some stuff takes time no matter how smart or evolved or “whatever” one is. And you know what time is, right?
I also fail to see the big advantage small operations have in usually not having to mess with all this for out of state sales, up until now. Shipping has become EXPENSIVE, esp. if one is a small operator and doesn’t get eBay or Amazon or even, oh, say “$20 million a year shipped” type discounts. If one only sells relatively small / light items for the item cost, then maybe tax is more than shipping, but my experience is that shipping is usually more than sales tax on the item(s). As a (quite small) former online retailer, I had to add something the locals could not, to make sales, in most cases.
Another thing: I find a $100,000.00 sales “threshold” ludicrous. The net profit from that $ amount of online sales in most cases would not even be close to poverty level income.
Last, I suppose all the arguments of who in business (and consumers) is or is not benefitted, taken in total, might be a wash? For a moment, I’ll accept that.
What is left is “more government”. Just what you support, eh? Eh?
Since I was one of those proposing automated solutions to this, I should reply. I was educated in the thread about the complexities that I didn't think about, such as the taxabiltiy of items and the tax exemptions of some customers. Forf the consulting work you do, you have at least federal tax on that income and perhaps state depending if your state taxes income. But for some other states you would also have to collect sales tax on that same income from your customers in those states. I appreciate getting more informed about this.
The $100,000 threshold is supposed to make it easier, but it will still require time for the merchant to run reports to see which states cross the threshold and require filing. Like each state has different rates, so too will each state have different thresholds. And this, assuming that it will only be state by state and not city by city and county by county which would be very cumbersome as each state that charges sales tax allows the counties and cities to add on additional points.
Why didn’t ND legislature think of going after the central source (banks & cc merchants) instead of after every mom and pop in the country? IMO if Congress is not going to take corrective action then the responsibility should fall to the credit card merchant rather than the online seller. The CC merchant captures the ship to zip code and the amount of sale. Let them keep and remit the tax on behalf of the merchant and let the online merchant have zero responsibility for any of it. I don’t know why ND has the ability to reach across states to enforce its sales tax on individuals but doesn’t have the authority to simply assess credit card processing companies (and banks) operating in their state (and I am sure they think they do). If they went after CC companies they would need no minimum threshold.